Town hall focuses on bankruptcy

Tuesday

May 1, 2012 at 12:01 AM

STOCKTON - Bankruptcy doesn't miraculously give a city a fresh start, Councilman Dale Fritchen told a crowd gathered Monday for his first town hall meeting held to make his case against Stockton's option for Chapter 9.

Scott Smith

STOCKTON - Bankruptcy doesn't miraculously give a city a fresh start, Councilman Dale Fritchen told a crowd gathered Monday for his first town hall meeting held to make his case against Stockton's option for Chapter 9.

Police and fire protection would likely be cut by half, and a judge doesn't have the power to wipe away debt, he said.

"I have heard a lot of people say, 'You go into bankruptcy and you get a fresh start,' " Fritchen told a crowd of about 50 people. "They don't realize that's not the way it works."

Fritchen was the lone dissenter on the seven-member City Council against sending the city into pre-bankruptcy mediation in a Feb. 28 vote. He took his case for seeking alternatives to the forum Monday at Weston Ranch High School.

Stockton would be the nation's largest city to seek bankruptcy protection.

Fritchen said he has spent hours studying the subject. Municipal bankruptcy is so rare because it costs millions in attorneys' fees and freezes cities out of the bond market, he said, borrowing lessons learned from Vallejo, which recently emerged from bankruptcy.

"It'll be a worldwide thing," he said of Stockton. "It won't be a positive. It will be a black eye for us."

In his presentation, Fritchen took questions and played news clips about problems in Vallejo and Harrisburg, Pa., a city that had its bankruptcy petition de nied by a federal judge.

Bankruptcy cost Vallejo $10 million, and the price continues to rise even after emerging from it, he said. Stockton is nearly three times as large, Fritchen said, and more complex. He estimated that Stockton would spend $20 million on lawyers.

Cuts to staff will still have to be made, Fritchen said, suggesting that other members of the council don't realize this. Asked why City Manager Bob Deis and the other council members believe it is the best route for Stockton, Fritchen suggested they ask them.

"We need to take our city back," Fritchen said.

Other City Council members will hold a separate series of town hall meetings throughout May to discuss with residents the budget and crime. Mayor Ann Johnston is scheduled to hold one at 6:30 p.m. Wednesday at Central United Methodist Church, 3700 Pacific Ave.

City leaders anticipate a budget deficit come July 1 of anywhere from $20 million to $38 million, even after consecutive years of deep cuts.